Monsters of Rock: Beament, Power-backed SPAC in US$1.1bn deal for Glencore’s CSA copper mine
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US listed mining SPAC Metals Acquisition Corp has taken a major step to becoming a real boy, paying US$1.1 billion ($1.5b) to become the owner of Glencore’s CSA copper mine in New South Wales.
The Cobar operation pumps out around 50,000 tonnes a year and was put on the market last year amid heavy interest as copper prices surged beyond US$10,000/t.
Acquisitive battery metals miner IGO (ASX:IGO), which owns nickel and lithium mines in WA, had revealed itself as the preferred bidder for the mine, which has been in operation since 1967, about a month ago.
But it dumped the deal after shareholders voted with their feet, sending its shares tumbling.
Metals Acquisition Corp, which is backed by resources heavyweights in former Northern Star (ASX:NST) boss Bill Beament and ex Fortescue Metals Group (ASX:FMG) head honcho Nev Power, was always rumoured as the other major chance.
It has swooped in after IGO passed, bagging its first operating asset and a major move for mining SPACs into the Australian market.
MAC CEO Mick McMullen says CSA will be the ideal cornerstone asset for the firm, having produced 41,000t of copper and 459,000oz of silver at a C1 cash cost of US$1.72/lb in 2021.
With a mine life of 15 years and exploration opportunities beyond, McMullen believes it will tap into the energy transition trend could will see copper demand grow rapidly in the coming years.
“We believe that copper has favorable fundamentals that will continue to support an elevated copper price,” he said.
“Copper is expected to play a key role in the global energy transition “megatrend”, with approximately 1 million tonnes per annum of new supply required from 2024 onwards in order to meet the surging demand forecast.
“With few new projects globally in the pipeline, increasing permitting issues and jurisdictional risk, and declining copper grades across the industry, we believe that there are significant challenges ahead to close the projected supply deficit.”
Three month LME copper is buying around US$10243/t, close to record highs.
The deal will be funded from a mix of cash, debt and equity, including a US$175m mezzanine convertible debt facility with Sprott and US$90m silver streaming arrangement with Osisko Gold Royalties.
Both will take a stake in MAC via a US$41.75m equity raising, including US$25m from Sprott, US$15m from OGR and US$1.75m from MAC’s CEO McMullen and CFO Jaco Crouse.
Materials and energy stocks closed the week down 1.64% and 0.52%, respectively, after some heat came out of the commodity run caused by Russia’s invasion of Ukraine.
China’s weakening property sector, Covid outbreak and markets also took a toll, sending mining stocks tumbling early in the week.
On Friday the commodities sector poster a decent rebound with materials lifting 0.77% and energy up 1.65%.
Iron ore miners were all in favour, with FMG leading the big names with a 2.2% gain.
Volatile Stanmore Coal (ASX:SMR), which is in the process of buying BHP’s BMC coal mines, jumped 11.89%.